Record gold production a Northgate tradition

In what seems to have become a tradition, Northgate Exploration has ended the year by setting yet another record for gold production.

Output from the company’s two Chibougamau, Que., gold-copper mines for the year ended Dec 31, totalled 81,500 oz gold, breaking the previous record of 79,300 oz produced in 1985.

Copper production at the mines fell over the year to 19.9 million lb from 22.7 million lb in 1985. Silver production totalled 111,000 oz, a slight drop from 131,000 oz in 1985.

Looking at the ore milled, some 650,653 tons were milled in 1986, down from 688,257 tons in 1985. The grade of gold was somewhat higher in 1986 at 0.138 oz per ton, versus 0.130 oz in 1985. Gold recoveries increased as well to 89.87%, up from 88.64% in 1985.

The grade of copper dropped to 1.58% from 1.70% in 1985, while recoveries were up somewhat to 97.62% from 97.48%.

Cash flow from operations took a big jump this year to $6.1 million compared with $927,000 in 1985. Working capital was also up at $18.4 million compared with $13.4 million at the end of 1985.

The company has also continued to reduce its debt. This figure was cut by $13.7 million over the year so long-term debt now stands at $28.6 million compared with $42.3 million in 1985.

In spite of these improvements to the balance sheet, the bottom line was hurt by a non-recurring non-cash writedown of the oil and gas properties of associated companies.

A consolidated loss of $4.8 million or 34 cents per share was posted, after an extraordinary tax recovery, compared with a consolidated loss of $2.1 million, with no extraordinary recovery in 1985.

The consolidated loss in 1986, before the extraordinary tax recovery of $3.03 million, amounted to $7.8 million or 56 cents per share.

The results for 1986 include a loss of $10.3 million on the equity in associated companies mainly as a result of the non-cash writedown in the carrying value of the oil and gas properties of the associates.

Income for 1986 excluding the writedown amounted to $2.4 million before the extraordinary tax recovery and to $5.5 million after the recovery.